Digital innovation has irrevocably changed the way that businesses need to operate to be successful. It means large companies must remain open to learning from, investing in, or partnering with the best up-and-coming start-ups to power their own competitive advantage. This can manifest as both revenue and strategic value.
The technological revolution has changed the face of businesses big and small across the United States. The companies that will thrive in the face of this are those that become a part of the change.
"Back in 2012, we decided to take a closer look at how the digital environment was evolving beyond the four walls of New York Life," says Joel Albarella, Head of New York Life Ventures. "Society was embracing exciting new technology related to e-commerce, mobility, social interactions, and the Internet of Things [IoT], among others.
"The time was right for New York Life to launch this group to better understand the evolution of technology outside of the company, and how it could be used to improve our businesses and enhance our speed to insight."
Internal innovation has to be a key part of any company's business model, but turning to external investments and partnerships with the nimble start-up community offers further opportunity for competitive advantage and strategic differentiation in addition to investment returns.
New York Life was one of the first life insurance companies to launch a corporate venture capital arm, and that foresight has paid off. In its six years of operation, New York Life Ventures has performed approximately 160 proofs of concept with emerging technologies and invested more than $200 million in over 30 venture capital funds and start-ups. The company is a key innovation driver not only for New York Life, but within the industry too.
For New York Life Ventures, capital investment is not just about generating returns, it's about accelerating innovation within New York Life as well.
"Through a strategic testing and investing approach and our dedicated innovation services efforts, we can accelerate the speed to insight and new value creation across the enterprise while feeding from our powerful external network rooted in trust," Albarella explains.
"All of this is ultimately focused on enhancing value chains to better serve New York Life's policy owners, agents, and employees now and well into the future."
"Through a strategic testing and investing approach and our dedicated innovation services efforts, we can accelerate the speed to insight and new value creation across the enterprise while feeding from our powerful external network rooted in trust"
-Joel Albarella, Head of New York Life Ventures.
When New York Life sought to upscale its data mining efforts to better identify meaningful trends, New York Life Ventures turned to the start-up community for innovative solutions. Working with New York Life Ventures, New York Life's data team onboarded Trifacta, a San Francisco-based company that provides a platform for exploring and preparing large data sets for analysis.
Trifacta's platform helped enable the cutting-edge machine-learning solutions that New York Life uses to easily access and analyze its data. An example of this includes combing through call recordings between New York Life policy owners and the company's service team in order to provide even greater experiences for customers.
New York Life's use of Trifacta's solution has resulted in well-received benefits. "By allowing our businesses to access and process data more easily, Trifacta's solutions have accelerated and improved decision-making when it comes to important business, risk management and policy owner-related challenges," explains Jeremy Bucchi, Head of New York Life's data engineering team.
"When we launched, we knew that having a strong strategic link between New York Life Ventures and New York Life was a must. Our success in nurturing this link is a critical differentiator for us," adds Albarella.
The wider New York Life organization has also benefited from New York Life Ventures' focus on innovation. Approximately 1,600 employees now receive assistance from the New York Life Student Loan Repayment Program (SLRP), which provides advice, counselling, and even financial assistance to those colleagues paying off educational loans.
This innovative program was developed from New York Life Ventures' relationship with a start-up company called Student Loan Genius—rebranded as Vault in September 2018. Although no direct investment was made by New York Life Ventures, introductions were set up between the start-up and New York Life's Health and Welfare Benefits team. New York Life has become one of just 4 percent1 of U.S. employers who offer a student loan repayment program, according to the Society for Human Resource Management.
Explaining the thinking behind the program, Matt Beecher, CEO of Vault, says, "We solve a very real and increasingly suffocating financial problem that affects a large number of employees: student loan debt. And, we are willing to get down into the trenches to create results that give our clients an advantage in the marketplace." 2
New York Life Ventures focuses anywhere there are opportunities to positively impact New York Life with a particular focus on: LifeTech, InsurTech, FinTech, Enterprise Tech, HR Tech, and Health and Wellness.
"We have invested in Digital Currency Group, which stands at the vanguard of blockchain technology and how it could revolutionize industries," says Albarella. "Our investment helps us think through how we might potentially apply that technology across the New York Life value chain at some point in the future. Understanding the technology while it's in the early stages of development better positions us with the knowledge of how to best use it to our competitive advantage in the future."
Looking ahead, New York Life and New York Life Ventures are working on how to marry internal and external expertise to unlock innovation and create new forms of value.
From New York Life Ventures' work with and eventual investment in mobile threat-defense firm Skycure dating back to 2014 through Skycure's eventual acquisition by Symantec in 2017, the partnership between New York Life and Skycure is a terrific example of how New York Life Ventures accelerates the pace of innovation at New York Life.
"The ability to work with New York Life as both an investor and a client is what set New York Life Ventures apart from other potential partners."
Skycure CEO and co-founder Adi Sharabani
"The ability to work with New York Life as both an investor and a client is what set New York Life Ventures apart from other potential partners," says Skycure CEO and co-founder Adi Sharabani. "It allowed us to expedite real-world testing and approval processes, working hand in hand with New York Life"s own technology teams. The feedback from that process has been critical to our development."
Before New York Life Ventures ever invested in Skycure, the two organizations built up a strong working relationship. This included carrying out a successful proof of concept and New York Life becoming a customer of the company. Over the years, New York Life Ventures continued to invest while Skycure became an integral security feature in New York Life's own shift to mobile, protecting employee devices from cyberattacks across multiple attack vectors including physical, malware, network, and vulnerability exploits.
Skycure's acquisition by Symantec in July 2017 was an important milestone for New York Life Ventures, as it demonstrated that the team could support a start-up's journey to an ideal outcome while also delivering strategic and financial returns to New York Life.
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In this age of digital innovation, New York Life embraces new opportunities that exist in changing environment
New York Life was ahead of the curve as one of the first life insurance companies to launch a corporate venture captial arm and stands today as an industry leader
New York Life Ventures has performed approximately 160 proofs of concept with emerging technologies and invested more than $200 million in over 30 venture capital funds and start-ups